Ethiopia has announced plans to develop the largest hydroelectric power project in Africa and has selected an Italy-based firm to construct the project, news agencies reported.

Ethiopian Power Corp. has selected Salini Construttori Spa, a Rome, Italy-based construction company to build the "Great Millennium Dam" for close to $5 billion.

The dam will be constructed on the Nile River just 40 kilometers (25 miles) from the border of Sudan. It is estimated that the hydro project will produce 5,250 MW of electricity. The first 700 MW are due to come online by 2015.

The Ethiopian government plans to fund the entire project, citing difficulties sourcing money from multilateral banks for its dam projects in the past, the Addis Fortune newspaper reported.

The dam is projected to cost about 80 billion birr (US$4.76 billion), or 95 percent of the government's budget for this fiscal year, reports indicate.